Govt issues NOC for furnace oil purchase
In view of a shortage of gas that is affecting power generation, the Ministry of Energy has issued a no-objection certificate (NOC) to power producers to import furnace oil.
The ministry issued the NOC for importing the much-needed fuel after the Petroleum and Power Division held a consultation with the Cabinet Standing Committee on Energy.
The decision was made after disruptions in the gas supply to power plants fuelled fears of an intense energy crisis and a dramatic reduction in the supply of electricity across the country.
According to sources in the Ministry of Energy, furnace oil will ensure smooth running of power plants and will also remedy the energy crisis. However, the sources added, the exorbitant cost of furnace oil -generated electricity will have to be borne by the consumers.
The K-Electric was also allowed to import 50,000 metric tonnes of furnace oil in October 2020. Amid gas shortfalls affecting power supplies, firefighting efforts are under way to facilitate dry-docking of the floating LNG terminal of Engro.
Earlier, it was reported that THE authorities were considering load-shedding with short power cuts per day. As the system operates on a sub-optimal capacity, the Power Division has complained plants were not getting enough allocations of RLNG volumes.
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Meanwhile, the Sui Southern Gas Company (SSGC) also admitted that it was using load-shedding in different areas of Karachi, insisting that it was a necessary step to prevent “burdening people with gas transmission losses”.
Speaking to media, SSGC Managing Director Imran Maniar said several parts of the city were experiencing gas load-shedding, adding the company was facing several issues in distribution particularly in old areas of the city.
Maniar blamed “gas theft and leakage” for cutting off the gas supply and shrugged off when asked about resolving the losses issue. “The unplanned earthworks damage the network and cause leakages. [The] leakage and gas theft are the primary reasons for the company’s losses.”
The company also proposed an increase of Rs109.78/mmbtu in gas prices to Rs789.24/mmbtu.
The twin power and gas crisis is intensifying across the country, with the SSGC issuing orders to suspend gas supply to the CNG and industrial sector in Punjab and Khyber Pakhtunkhwa from June 29.
Sources in the Petroleum Division said it will slam the brakes on gas supply from tonight.
Federal Minister for Energy Hammad Azhar also acknowledged on Sunday that the country could face a power shortage from June 29 to July 6.
Earlier, PML-N leader and former finance minister Miftah Ismail lashed out at the PTI-led government for causing an energy crisis in the country and delays in the dry-docking of LNG terminals.
"There is also a shortage of gas in the residential areas of Karachi. They are generating electricity at Rs20 per unit from diesel. We had decided that furnace oil would not be used for power generation," he said.
Miftah Ismail said electricity was generated from furnace oil in November and December last year. “If electricity is plentiful, then why is there load shedding?”
He asked the government to stop lying. “Two gas cargoes are not being brought to Karachi and furnace oil is being used because you have no choice,” he added.